Although bearish sentiments currently mount, a popular crypto analyst and trader, Nicholas Merten, has stated that Bitcoin (BTC), the largest cryptocurrency by market capitalization, is about to surprise everyone, citing a historical indicator that recently popped up.
In a new strategic session, the closely followed analyst told his teeming YouTube subscribers that price action indeed looks unattractive for the flagship crypto, but one indicator is suggesting that the bulls are about to take charge of the market.
According to Merten, big spikes in volume on Bitcoin (BTC) chart have historically served as reliable indictors to be sure of trend reversals. He stated that the current spike in volume is similar to the bottom of the price corrections in both March 2020 and May 2021.
As stated by the analyst, Bitcoin is gearing up for an unexpected rally considering the large volume spike printed after the collapse of the Terra ecosystem and the subsequent market volatility.
Nicholas Merten noted:
“I want to go out on a limb and make a bold claim about the crypto markets. Especially as sentiment is incredibly fearful right now. That is that right here, right now, no matter if you believe that we have further to go down in price in the preceding months, that we’re in a bear market, or if you feel that the recent correction was the bottom…
“Right here right now, it is much more likely than not that we’re going to see a significant rally in price recovering a lot of the losses, than continue down to the downside…
“The weekly timeframe gives us a very good overview of when throughout history there were capitulation events, that there were major liquidation events in the market, that effectively led to spikes in volume and therefore a significant decline in price…
“This market is driven by credit. Is driven by leverage. A lot of the major moves upward and downward are caused by long-term players in the market who are taking on a little too much risk than they should.
“That has led to the exacerbated rallies in price, recoveries in the market, and all the new all-time highs that we’ve set but it also played a role in the sharp 50% corrections that we’ve seen throughout this cycle, many times before.”